What is it? Financial support includes grants, bursaries, scholarships and fee-waivers. When offered to prospective students, financial support is designed to help overcome the perceived or actual cost of applying and/or going to higher education (HE).

Evidence? There is a small but high-quality body of evidence that finds financial support can have a positive, albeit small, impact on HE participation. Some evidence also suggests it can encourage students to apply to courses with higher entry requirements or that are further from home. However, much of the existing research comes from the USA. More evidence is needed on the impact of financial support in a UK context, and particularly on support offered by individual HE providers as opposed to maintenance grants.

Should HE providers offer financial support to widen participation? Overall, the international evidence base suggests that providers should include financial support as part of their approach to boosting participation among students from low-income backgrounds. Most of the evidence relates to grants/bursaries/scholarships rather than fee-waivers. Financial support is likely to be most effective where:

  • It is combined with a proactive campaign to help prospective students understand and access what is available to them.
  • It is part of a broader programme of engagement with students – for more information, see multi-intervention outreach.
  • It is need-based (i.e. based on financial background) rather than merit-based (i.e. based on prior attainment).

Financial support offered to prospective students aims to reduce the perceived and actual financial barriers to applying and attending HE. The advice on this page relates to:

  • Grants/bursaries/scholarships – non-repayable monetary support.
  • Fee-waivers – a reduction in HE course costs.

The aim of this support is to reduce the actual and/or perceived cost of HE.

This page focuses on support which is offered, or promoted to, students before they enter HE. Financial support can also be made available to students after they enter HE – for more information, see financial support (post-entry).

Financial support also sometimes forms part of broader programmes of engagement with students  – for more information, see multi-intervention outreach.

The advice on this page draws on evidence about financial support for prospective HE students from low-income backgrounds. Indeed, this group of students has been found to experience considerable and increasing financial stress related to their studies (Halliday-Wynes & Nguyen, 2014). They are more likely to see costs of HE as a debt rather than an investment and to be pessimistic about its benefits.

In the case of scholarships, this kind of financial support is sometimes provided for high-achieving students who meet certain academic eligibility criteria (so called ‘merit-based’ support).

An evidence review conducted by the Office for Fair Access found that financial support was not the most significant determinant in UK students’ decision to apply to HE or on their choice of institution (OFFA, 2015). However, it appears that a sizable minority of students do take this parameter into account.

In this context, financial support seems to have a positive, albeit in some case small, effect on HE participation. A study on changes to student finance in the UK found that an increase in maintenance grants of £1,000 per year resulted in an increase in participation of around 3.95 percentage points (Dearden et al. 2014) and a similar impact has been observed in other countries, including the USA (Bettinger, 2015; Hoxby 2013; Page et al, 2018), France (Fack & Grenet, 2015) and to a lesser extent in Denmark (Nielson et al., 2010).

Another evidence review found that although needs-based bursaries can overcome financial barriers to participation, their effectiveness to promote widening participation (WP) is not yet proven (Kaye, 2020). It means that financial support is a necessary but not a sufficient precondition for effective WP strategies.

Some evaluations conducted outside the UK have found grants/bursaries and scholarships encouraged students to apply to courses with higher entry requirements (Hoxby & Turner, 2013; Page et al., 2018) or to universities/colleges that are further from their home (Vergoli & Zanini, 2015), but again this has not been tested in the UK. Financial support can also influence students’ decision to study certain subjects. Using a regression-discontinuity design, Castleman et al., (2017) found that need-based grants aid eligibility increased science, technology, engineering and mathematics (STEM) credit completion by 20 to 35 percent among academically-ready students in a large public higher education system. This study also provides non-significant evidence that aid offers increased attainment in STEM fields, although we cannot rule out null impacts on STEM degree production.

Furthermore, several causal studies have been assessing the impact of providing information on financial support to prospective students. In the US context, Castleman et al., (2017) used a difference-in-differences methodology to assess the impact of text reminders encouraging university applicants to file their financial aid applications. These messages provided targeted, semi-personalized information, about important financial aid deadlines, making salient the specific forms required and prompting students to plan specific times to complete these tasks. Although this intervention increased financial aid applications, it did not significantly affect student enrollment. However, an RCT investigating the effect of providing college counselling to low-income students during the summer showed that addressing financial and information barriers faced by these students led to substantial improvements in both the rate and quality of college enrollment (Castleman et al., 2012). In another RCT, McGuigan et al.’s study of London schools found that disadvantaged students were the least likely to access information on HE finances even when it is readily available to them (McGuigan et al., 2016).

First of all, identifying which students to target with financial support interventions can be a challenge. In the UK, area-based measures are often used but are criticised for lacking precision. The risk of contextual indicators is that they focus on increasing the number of participants from deprived areas whether or not individuals themselves are disadvantaged and perhaps miss other disadvantaged students.

Secondly, multiple research papers find low levels of understanding of the detailed aspects of student finance amongst prospective HE applicants. It is important to raise awareness of financial support options. Ehlert et al., (2017) found that providing information about funding opportunities for HE significantly increases the likelihood to apply to university despite other barriers such as economic constraints. However, this study was set in Germany and might not translate to the UK context where fees are significantly higher.

Several other studies have shown that information alone is not likely to influence student behaviour (French & Oreopoulos, 2017). Instead, students need help to proactively navigate the available support (Moore et al., 2013; Scott-Clayton; 2015). Financial support might best be coupled with other forms of engagement from HE providers – for more information, see multi-intervention outreach.

Evidence also suggests the use of solely merit-based support programmes (i.e. support for students who meet certain academic eligibility criteria) can have a negative impact on students from low-income backgrounds. This may be because students with high attainment are typically from more advantaged backgrounds (Herbaut & Geven, 2019; Younger et al. 2018). Therefore, this kind of support needs to be targeted at students from low-income backgrounds with requisite levels of attainment to be effective.

Herbaut and Geven (2019) argued that enrolment in HE as a response to financial aid might follow a threshold effect, meaning that it is only effective when it covers a significant portion of unmet financial need. Evidence on this question would be highly valuable.

Currently we do not have enough evidence to make claims about which forms of financial support (bursaries/grants/fee-waivers/scholarships) are most effective. There are also questions around the threshold after which financial support is actually effective at increasing enrolment to HE because it covers a significant proportion of the unmet financial need (Herbaut and Geven, 2019).

Importantly, much of the existing research has taken place in the USA. As student finance arrangements differ from country to country, we cannot make conclusive statements about how some forms of financial support might apply in a UK context. We are lacking causal studies on the impact of financial support offered by HE providers in the UK. Even UK studies published in the 2000s in the UK context might not be relevant anymore, given that the system of student finance has considerably evolved over the last 20 years. More recently, the context of rising inflation may also have decreased the net value of the financial support provided to low-income students.

Multiple pieces or research measure the impact on individuals who received the support because their household income was just within the eligibility threshold, versus those who didn’t receive the support because they were just outside the threshold. Given the evaluation design used, there is currently no causal research on the importance of financial support for students from very low-income backgrounds who sit far from this margin but still receive these programmes. These students are likely to have a greater need for financial support than those who only just meet the threshold and so the impact on these individuals could be bigger than the existing research suggests.

There is only one study that compares the impact of financial support with other approaches. The study finds that the impact of combined outreach and financial support is large compared to either of these approaches in isolation (Herbaut & Greven, 2019). More evidence on the relative scale of the impact of financial support versus other approaches would help HE providers understand how best to structure their overall outreach offering.

TASO’s advice on the efficacy of financial support in widening participation is based on evidence from eight causal research studies and six literature reviews. All the studies used experimental or quasi-experimental techniques to assess the impact of various forms of financial support and most of this research took place in the US.

We have focused on evidence produced in the last 10 years and, in the case of UK-based evidence, since the student finance reforms were introduced in 2012.

The key references are given below.

Causal studies:

Bettinger, E. (2015). Need-Based Aid and College Persistence. Educational Evaluation And Policy Analysis, 37(1_suppl), 102S-119S. doi: 10.3102/0162373715576072

Castleman, B. L., Arnold, K., & Wartman, K. L. (2012). Stemming the tide of summer melt: An experimental study of the effects of post-high school summer intervention on low-income students’ college enrollment. Journal of Research on Educational Effectiveness, 5(1), 1-17. doi: 10.1080/19345747.2011.618214

Castleman, B. L., Long, B. T., & Mabel, Z. (2018). Can financial aid help to address the growing need for STEM education? The effects of need‐based grants on the completion of science, technology, engineering, and math courses and degrees. Journal of Policy Analysis and Management, 37(1), 136-166. doi: 10.1002/pam.22039

Dearden, L., Fitzsimons, E., & Wyness, G. (2014). Money for nothing: Estimating the impact of student aid on participation in higher education. Economics of Education Review, 43, 66-78. doi: 10.1016/j.econedurev.2014.09.005

Fack, G., & Grenet, J. (2015). College Access and Success for Low-Income Students: Evidence from a Large Need-Based Grant Program. American Economic Journal: Applied Economics, 7(2), 1-34. doi: 10.1257/app.20130423

Halliday-Wynes, S., & Nguyen, N. (2014). Does financial stress impact on young people in tertiary study?. National Centre for Vocational Education Research. Linked here.

Hoxby, C., & Turner, S. (2013). Expanding college opportunities for high-achieving, low income students. Stanford Institute for Economic Policy Research Discussion Paper, 12, 014. Linked here.

Nielsen, H., Sørensen, T., & Taber, C. (2010). Estimating the Effect of Student Aid on College Enrollment: Evidence from a Government Grant Policy Reform. American Economic Journal: Economic Policy, 2(2), 185-215. doi: 10.1257/pol.2.2.185

Page, L., Kehoe, S., Castleman, B., & Sahadewo, G. (2017). More than Dollars for Scholars. Journal Of Human Resources, 54(3), 683-725. doi: 10.3368/jhr.54.3.0516.7935r1

Vergolini, L., & Zanini, N. (2015). Away, but not too far from home. The effects of financial aid on university enrolment decisions. Economics Of Education Review, 49, 91-109. doi: 10.1016/j.econedurev.2015.08.003

Literature reviews:

French, R., & Oreopoulos, P. (2017). Behavioral barriers transitioning to college. Labour Economics, 47, 48-63. doi: 10.1016/j.labeco.2017.05.005

Herbaut, E., & Geven, K. (2020). What works to reduce inequalities in higher education? A systematic review of the (quasi-)experimental literature on outreach and financial aid. Research In Social Stratification And Mobility, 65, 100442. doi: 10.1016/j.rssm.2019.100442

Kaye, N. (2020). Evaluating the role of bursaries in widening participation in higher education: a review of the literature and evidence. Educational Review, 1-23. doi: 10.1080/00131911.2020.1787954

Moore, J., Sanders, J., & Higham, L. (2013). Literature review of research into widening participation to higher education. Report to HEFCE and OFFA. AimHigher Research & Consultancy Network. Linked here.

Scott-Clayton, J. (2015). The role of financial aid in promoting college access and success: Research evidence and proposals for reform. Journal of Student Financial Aid, 45(3), 3. Linked here.

Younger, K., Gascoine, L., Menzies, V., & Torgerson, C. (2018). A systematic review of evidence on the effectiveness of interventions and strategies for widening participation in higher education. Journal Of Further And Higher Education, 43(6), 742-773. doi: 10.1080/0309877x.2017.1404558

Other studies:

Ehlert, M., Finger, C., Rusconi, A., & Solga, H. (2017). Applying to college: Do information deficits lower the likelihood of college-eligible students from less-privileged families to pursue their college intentions?: Evidence from a field experiment. Social science research, 67, 193-212. doi: 10.1016/j.ssresearch.2017.04.005

Harrison, N., & McCaig, C. (2015). An ecological fallacy in higher education policy: the use, overuse and misuse of ‘low participation neighbourhoods’. Journal of Further and Higher Education, 39(6), 793-817. doi: 10.1080/0309877X.2013.858681

McGuigan, M., McNally, S., & Wyness, G. (2016). Student awareness of costs and benefits of educational decisions: Effects of an information campaign. Journal of Human Capital, 10(4), 482-519. doi: 10.1086/689551

Office For Fair Access. (2015). What do we know about the impact of financial support on access and student success?. Linked here.